OneConnect Financial Tech Co Ltd ADR (NYSE: OCFT) is a leading FinTech enabler with significant competitive advantages in a market that represents huge opportunity, according to KeyBanc Capital Markets.
KeyBanc’s Hans Chung initiated coverage of OneConnect Financial Tech with an Overweight rating and a price target of $15.
Small and medium-sized banks in China have an urgent need for digital transformation, amid tightening regulations, Chung said in the initiation note.
OneConnect Financial Tech had advantages in technology and industry expertise, which could help differentiate it from competition, the analyst mentioned. He added that the company’s revenues were generated mostly by recurring transactions, and any growth in its clients’ business would lend upside.
Chung said further that OneConnect Financial Tech is in “the early stage of the secular trend” and that a majority of its top 30 bank clients had outperformed the industry in terms of loan growth and return on equity in the past.
The analyst believes that OneConnect Financial Tech’s competitiveness is enhanced by its industry-leading fintech and blockchain portfolio and its deep relationship with one of Asia's leading investment firms, PAG.
Shares of OneConnect Financial Tech were up 14.27% to $12.41 at the time of publishing on Tuesday.